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HomeMy WebLinkAboutStaff Report 2412-3855CITY OF PALO ALTO CITY COUNCIL Special Meeting Monday, December 16, 2024 Council Chambers & Hybrid 5:30 PM     Agenda Item     26.Policy and Services Committee Recommendation to Adopt a Policy to Reimburse Council Members Up to $2,000/year from the City Council Contingent Account for Technology Resources and Other Actual and Necessary Expenses Incurred in the Performance of Official Duties At Places Supplemental Report added, Staff Presentation City Council Staff Report Report Type: ACTION ITEMS Lead Department: City Manager Meeting Date: December 16, 2024 Report #:2412-3855 TITLE Policy and Services Committee Recommendation to Adopt a Policy to Reimburse Council Members Up to $2,000/year from the City Council Contingent Account for Technology Resources and Other Actual and Necessary Expenses Incurred in the Performance of Official Duties This Agenda Item was originally published on the November 4, 2024 City Council meeting. The Agenda Item was removed off the agenda and was not heard on November 4, 2024. The original report has been republished before you now on the December 16, 2024 City Council meeting. RECOMMENDATION The Policy and Services Committee recommends that the City Council adopt the attached policy authorizing Council Members to receive reimbursement, up to $2,000 per calendar year (taken from the City Council Contingent Account funding), for technology resources or other actual and necessary expenses incurred in the performance of official City duties. The policy includes procedures for documentation and audits. If adopted, the policy will be incorporated to the Council’s Procedures and Protocols Handbook. BACKGROUND On April 24, 20231, the Council updated the Procedures and Protocol Handbook and gave a series of referrals to the Policy and Services Committee to consider. After deliberation on those referral items, the Policy and Services Committee made recommendations to the Council on most of the referrals and the Council acted upon them on February 26, 2024. The Policy and Services Committee has continued to work on this referral: Protocols Section 4.1: Miscellaneous Expenditures. Council referral for the committee to discuss the establishment of appropriate parameters for Council discretionary 1 April 24, 2023 City Council Meeting Item 6, Staff Report #2304-1287: https://recordsportal.paloalto.gov/Weblink/DocView.aspx?id=82381 expenditures and whether to allocate $2,000 annually from the Council contingency fund for each Council member to decide its purpose. The Policy and Services Committee revisited this Council referral on March 12, 2024 to consider allocating $2,000 annually from the Council contingency fund for each Council member. This allocation would cover expenditures aligned with Council-defined purposes. The discussion was a continuation from February 13, 2024, where the Committee decided to further examine program details and compare similar initiatives in neighboring jurisdictions. During the March 12 meeting, staff presented similar programs in neighboring jurisdictions and reviewed the requirements under Cal. Govt. Code section 53232.2, which allows reimbursement for “actual and necessary expenses incurred in the performance of official duties” and requires certain procedures for implementing such a policy. The Policy and Services Committee focused on reimbursement for cellular phone use and technology when used for official business. On September 10, 2024, the Policy and Services Committee discussed a draft policy, Attachment A, for reimbursing expenses for cell phone use and technology when used for official business. By a vote of 2 to 1 (Kou no), the Committee voted to recommend the Council incorporate the draft reimbursement policy into the City Council Procedures and Protocols Handbook. ANALYSIS Given the recent increase in Council salaries, a direct stipend, which would be taxable and is considered salary, is not feasible as it would surpass City of Palo Alto’s Charter salary limits. Instead, the proposed policy focuses on reimbursements for actual expenses, which are not considered taxable income and are regulated under California Government Code Sections 53232.2 and 53232.3. Section 53232.2 requires a written policy specifying the types of expenditures that qualify for reimbursement. Section 53232.3 requires members to submit expense reports and receipts documenting reimbursable expenditures, and provides that records are subject to release under the Public Records Act. In conformance with Section 53232.2, Attachment A establishes a written policy for allowable reimbursement with monitoring and reporting requirements. Eligible expenditures include computers, tablets, smart phones, software, subscriptions services (for example internet or Zoom), and cellular phone service. The draft policy includes a provision for (a) full reimbursement of technology purchases and services up to the annual maximum allowed by the policy and used solely for official business, and (b) 25% reimbursement for devices and services that are used for both personal and official purposes. The 25% partial rate of reimbursement is intended to establish a reasonable estimation of official use where devices or services are used for both personal and official purposes, where precise accounting of official and personal use is impractical or impossible. The Council could designate a different percentage if it reasonably believes that Council members use their dual-use devices more or less frequently than one quarter of the time. Any equipment purchased would be owned by the individual Council member and is their responsibility for service and maintenance. 2 Any questions regarding the appropriateness of an expense should be resolved by the Council before the expense is incurred. Reimbursements needing Council approval can be processed in batches as a single item, which could be placed on Consent if the Council so directed. FISCAL/RESOURCE IMPACT ENVIRONMENTAL REVIEW 2 Note that travel, lodging and meals while on City business are already separately covered by the Travel Policy. In addition, one other type of expenditure that Policy and Services discussed—services of paid interns or staff— would not be appropriate for reimbursement under the limited reimbursement policy before Council today. This is because use of paid interns or staff is a more significant proposal that would require further policy discussion, additional fiscal resources, and a more robust structure and set of policies. ATTACHMENTS APPROVED BY: CITY COUNCIL REIMBURSEMENT POLICY FOR EXPENSES INCURRED IN THE PERFORMANCE OF THEIR OFFICIAL DUTIES 1. PURPOSE This Policy establishes the guidelines and standards regarding reimbursement of actual and necessary expenses of the City Council incurred in the performance of official City duties. Council members may incur expenses in fulfilling the responsibilities as an elected official. All expenditures of public funds must be related to the performance of City business. Council members may be reimbursed for actual and necessary expenses incurred in the performance of authorized City business and official duties in conformance with this Policy. Reimbursement for travel expenses shall be governed by Section 7 -City Council and Boards and Commissions Policy for Travel and Miscellaneous Expenses Reimbursement. 2. AUTHORIZED EXPENSES Communications tools (e.g., cellular phones, data plans, computers, and Internet access) are necessary for Councilmembers to fulfill their official responsibilities of communication with constituents, City staff, and others. In lieu of the City providing communication tools to each Council member, Council members are expected to use personal devices in the course of their duties. 2.1 Technology Purchases Reimbursement Council members may be reimbursed for technology purchases that are essential for performing official duties. These purchases include, but are not limited to, computers, tablets, software, and subscriptions services (e.g., internet, Zoom, etc.). If the technology purchase will be used exclusively for official business, the Council member will be reimbursed for all the actual cost of the purchase up to $2,000 each calendar year from the City Council Contingency Funding. If the City fully reimburses a Council Member for a physical device, the device must be returned to the City at the end of the Council Member's service. However, the City may allow the Council Member to keep the device if it is determined that the device has no value or is no longer useful to the City. If the technology purchase will be used for personal use as well as official business, Council members will be reimbursed 25% of the actual cost of the purchase up to $2,000 each calendar year from the City Council Contingency Funding. Considering the difficulty in parsing out official use versus personal use in this circumstance, this shall be considered a reasonable amount to represent the reimbursement for actual costs associated with the technology purchase. 2.2 Cellular Phone Usage Reimbursement Council members will be reimbursed 25% of the actual total monthly cost of the use of their cellular phone up to $2,000 each calendar year from the City Council Contingency Funding. Considering the difficulty in parsing out official use versus personal use in this circumstance, this shall be considered a reasonable amount to represent the reimbursement for actual costs associated with the use of their cellular phone. 2.3 Expenditures Requiring Council Approval Except as set forth in this Section, all other expenditures require prior approval by the Council at a public meeting. Any questions regarding the propriety of a particular type of expense should be resolved by the Council before the expense is incurred. 3. MONITORING AND REPORTING All expenses and claims for reimbursement shall be submitted on City expense report forms within 60 days of the incurred expense. All expense reports shall be accompanied by documentation showing that the expenses comply with this Policy for expenditure of public resources. Inability to provide such documentation in a timely manner may result in the expense being borne by the Councilmember. Reimbursements that do not comply with this policy will not be approved. Expense reports are subject to audits. Approved reimbursements will be processed and issued within 30 days of approval. CITY COUNCIL REIMBURSEMENT POLICY Mark Vanni, Assistant City Attorney Chantal Cotton Gaines, Deputy City Manager December 16, 2024 www.cityofpaloalto.org Recommendation is from the Policy and Services Committee Committee Recommended Action: Adopt a Policy to Reimburse Council Members up to $2,000/year for Technology Resources and Expenses Funding Source: City Council Contingency Background: This was a referral from Council to Policy and Services during the Council Procedures and Protocols Handbook Discussion POLICY RECOMMENDATION 2 STATE LAW REQUIREMENTS Direct stipends not feasible due to City Charter salary limits incorporating State law Governed by California Government Code Sections 53232.2 and 53232.3: o Written policy specifying eligible expenditures for actual and necessary expenses o Expense reports, receipts, and subject to Public Records Act 3 PROPOSED POLICY: AUTHORIZED EXPENSES Technology Purchase Reimbursement o Includes computers, tablets, software, and subscriptions services (e.g., internet, Zoom, etc.) o 100% reimbursement for exclusive official use; 25% for mixed use 4 PROPOSED POLICY: AUTHORIZED EXPENSES Cellular Phone Usage o 25% of monthly costs reimbursed Other necessary expenses not mentioned in the policy require Council approval Up to $2,000 per Council Member each calendar year from budgeted Council Contingency Funding 5 REPORTING REQUIREMENTS Submit with documentation within 60 days of incurring expense Reports are subject to audits and Public Records Act Approved reimbursements are to be processed within 30 days 6 Recommendation from the Policy and Services Committee: Adopt the attached policy authorizing Council Members to receive reimbursement, up to $2,000 per calendar year (taken from the City Council Contingent Account funding), for technology resources or other actual and necessary expenses incurred in the performance of official City duties. Upon adoption, this policy will be incorporated to the Council’s Procedures and Protocols Handbook. POTENTIAL COUNCIL MOTION 7